More Than Just Talking Heads1 Jul, 2015 By: Thomas Haire Response
Gregg Spiridellis says JibJab’s success as a digital entertainment company is based on top-notch content and laser-sharp marketing — both online and off.
“Our business was built leveraging direct-to-consumer digital marketing techniques,” says Gregg Spiridellis, co-founder and CEO of digital media and entertainment company JibJab, based in Marina del Rey, Calif. “We were obsessed with building our e-mail list and making it easy for visitors to refer our website to friends — and that’s how we got ‘This Land’ to go viral in 2004.”
The five intervening years between JibJab’s founding in 1999 and the “overnight” success of the “This Land” cartoon video featuring then-presidential candidates George W. Bush and John Kerry weren’t without their own successes and difficulties, including the dot-com crash. Gregg and his brother Evan Spiridellis had complementary skills that helped them envision building a new entertainment brand from a garage in Brooklyn, N.Y. — and in 2015, the company now boasts more than 1.5 million paid subscribers, 100 million site visitors each year and an expanding staff of 85 in Southern California, where the company moved in 2002.
A true digital and data-driven marketing success story, JibJab also recently moved into offline marketing, testing a TV campaign during the holiday season in 2013 before rolling out a full TV campaign in November 2014 — and finding major success in driving new users. JibJab’s success using offline marketing to drive new customers for its online service is just one of many reasons that Alessandra Souers, the company’s brand director, was invited to speak at Response Expo in April.
“We did TV the past two years, and it was wildly successful for us,” Spiridellis says. “With our e-card business, TV has to happen at a seasonal high point, where what we’re offering is relevant — so that means December, the holidays. Both in our test in 2013 and our full rollout in 2014, TV truly allowed us to acquire new users in a very cost effective way.”
JibJab’s baby steps into the TV world, though, have their genesis at the company’s earliest stages, thanks to Evan Spiridellis’ background as an independent animator and the concepts that have been the company’s backbone throughout — entertaining, humorous, original short video programming.
Finding ‘This Land’
Spiridellis, a New Jersey native, graduated with a finance degree from Rutgers University and stepped into the investment-banking world. In the late 1990s, he was working on his M.B.A. at the Wharton School of Business when, he says, “I really began to reconnect with the love of technology I’d had as a child.”
At the same time, his brother Evan — who had graduated from the acclaimed Parsons School of Design — was working as an independent animator, creating festival-winning stop-motion films. The two were inspired by an animated video they viewed streaming over a 56K modem and began to consider how they might take part in a new world of online entertainment.
“We started playing around with this technology — vector animation in its earliest dial-up stage — and after looking at the possibilities, we decided to hang a shingle,” Spiridellis says. “There were two big trends happening: the cost of production was falling, with computers and off-the-shelf software allowing us to make cost-effective content that used to cost millions of dollars; and the ability to distribute globally via the Internet, with no gatekeeper. We believed that if we created quality entertainment, people would view and share it. It was the idea of ‘viral’ before the term was coined.”
The brothers spent their first few years in business “doing ad and production work-for-hire gigs,” Spiridellis says. “We’d then reinvest everything we made from those jobs into our own original programming ideas.”
Spiridellis’ experience in the world of finance was helpful. “I’d done so much quantitative work,” he says. “I knew the nuts-and-bolts of working with financial statements and using a measurement-centric approach to our marketing. What information do we need to capture? What’s our conversion rate on our newsletter? What is our click-through on various e-mails?”
Those analytical skills, along with the successful work JibJab did producing high-quality e-Cards for other websites allowed it to build a small following for their own work. “Early on, we figured out the importance of building an e-mail database,” Spiridellis says. “From day one, our site featured a persistent ‘sign up for our newsletter’ link and all of our videos included persistent ‘share’ links. Those two things really helped build out our audience.”
JibJab enjoyed some early viral success in 2000 with two interactive videos — ‘Founding Fathers,’ featuring America’s early leaders rapping about the Declaration of Independence, and George W. Bush and Al Gore featured in a rap battle for the 2000 presidential election. The Bush-Gore video got JibJab noticed on a number of national media outlets, including Fox’s “MadTV,” ABC News and CNN.
But then came the dot-com crash — and JibJab’s entire client base went out of business. The brothers scrambled, finding various ways to keep JibJab afloat: creating a line of gag gifts for retail sale based on their popular “Nasty Santa” online series; creating animation for companies like Disney and Kraft; and even publishing a children’s book with hip-hop star LL Cool J.
By early 2002, JibJab moved from Brooklyn to new digs in Los Angeles and was able to continue to survive through contracted work with companies like Disney and TV shows like “Arrested Development.” It also continued to work in political parody, finding a spot at the Sundance Online Film Festival with a short called “Ahnold for Governor,” cracking wise about actor Arnold Schwarzenegger’s eventually successful run for governor of California.
“This whole time, we were accumulating an audience — by 2004, we had 130,000 e-mail addresses for our newsletter distribution,” Spiridellis says. That group of followers would have a hand in what happened next.
Hoping to replicate their success with viral videos from the 2000 presidential campaign, the brothers produced a video about the Bush-Kerry election. On July 9, 2004 — for $450, the cost of the e-mail blast — JibJab sent “This Land” to its 130,000 e-mail subscribers.
Within days, millions of requests poured in for the satirical video and the brothers were conducting their first national TV interview on Fox News, cracking that their Web server had “spontaneously combusted.”
“Two years before the debut of YouTube, we drove more than 80 million views, purely on the strength of the content and its relevance,” Spiridellis recalls of the head-spinning time that featured international media attention. Those 80 million views by Election Day came from every continent, including Antarctica, and on New Year’s Eve, ABC’s World News Tonight named the Spiridellis brothers “People of the Year.”
Following the success of ‘This Land,’ the brothers kept true to their earliest dreams, sticking closely to — and even doubling down on — new media. In 2005, JibJab created a series of movie trailers that played prior to each film screened at Sundance, and it also worked on deals with Yahoo, MSN Video and Anheuser-Busch. The company also debuted the first three — of 16 eventual — videos on “The Tonight Show with Jay Leno.”
“We’ve even premiered original shorts for both President Bush and President Obama,” Spiridellis says. “But eventually, we knew it would be hard to make money in short-form viral comedy. We began to look at these opportunities as our marketing expense — but we needed to find a scalable business model that would allow us to produce online comedy that also paid the bills.”
In 2007, still seeking that model, Spiridellis says that JibJab took a “short detour” into a space it eventually decided didn’t make sense. “We moved into branded entertainment, working with different branders to create videos that could be distributed everywhere,” he says. “One was a big success, but was actually hurting our brand. Producing videos that satisfy the marketer’s needs, the audience’s needs, and our own branding needs wasn’t working. We understood that the best way to build our brand authentically was to go to a direct-to-consumer business model.”
In August 2007, JibJab released “Starring You,” which let people put themselves into the company’s images and videos. By early 2008, they were launching their subscription e-Card service. “It became the driver for the business we have today,” Spiridellis says. “We were able to monetize the business, while also looking for innovative distribution strategies.”
He recalls that Facebook had just opened up its platform at the same time, allowing JibJab to be “a pioneer” on it. “We integrated with Facebook and that helped drive massive growth,” Spiridellis adds.
In just three years — by mid-2010 — more than 150 million heads had been uploaded to JibJab content, with personalized videos and images viewed more than 400 million times. But beyond the free content, most of the available content from JibJab was available only to paid members — a shift prompted by three things: a subscription model meant JibJab could focus on making content customers (not advertisers) wanted; the ability to remove banner ads from their site, improving customer experience; and the ability to pay the artists, technologists and business experts who make JibJab content possible.
“Today, we’ve built a subscription model that has more than 1.5 million paid subscribers and drives more than 100 million visitors to our site each year,” Spiridellis says.
TV Makes an Impression
When discussing JibJab’s current marketing efforts, Spiridellis says it comes down to two modes: optimization and innovation.
“On optimization, it’s figuring out how to do what we do better,” he contends. “We always dig deep to find out what content works extremely well and find a way to provide more of that to our customers. For instance, the past couple of years, music videos have worked very well — helping us expand past the key holidays and birthdays.”
It also includes optimizing what’s still the company’s main marketing outreach — e-mail. “We try to leverage what our customers like — personalization — in our e-mail messages,” Spiridellis says. “When you get an e-mail outreach from us, your face in the message is a great way to optimize it. It has incredible relevance and drives a huge lift in response.”
Souers says personalized e-mail “transformed not just our e-mail marketing program, but our business.” She adds, “We’re fortunate to have access to a unique set of ‘data’ — pre-cut faces of our customers, as well as their friends and family. Staying true to the JibJab brand, we wanted to use these faces in a fun, yet secure, way to enhance the JibJab experience in the in-box.”
Souers says that the marketing team took the concept of what JibJab does with its Starring You videos and e-Cards and applied it to e-mails. “When you open an e-mail about a new music video we just launched, you’ll see the most recent faces you uploaded to your JibJab account, cast as the characters of the video. It serves as a pretty compelling preview of the card we want you to make and share,” she says.
Just how well is this effort working? In tests against a “control,” which Souers describes as e-mails where the user sees stock photo faces or faces with question marks, results have been stunning.
“The personalized experience has driven up to a 100-percent lift in click-through rate, a 43-percent lift in conversion rate, and a 345-percent lift in revenue over the control,” Souers says. “It’s a game changer!”
Spiridellis also says that JibJab is always testing new paid acquisition channels to find “pockets of users who have not visited our site previously.” He adds, “We’re also building out search marketing and Facebook, continually, making sure we understand and optimize the economics.”
Regarding innovation, Spiridellis believes that it’s crucial for JibJab to make sure it is evolving with the market. “I never want us to be comfortable,” he says. “Yes, the e-Card business is still growing, but this year we’re putting a big emphasis on messaging. We see text and mobile messaging emerging as a distribution channel, as powerful today as Facebook was in 2007. It’s the next frontier.”
Spiridellis says the JibJab team is working on “expressive content” for that space, introducing “short-form GIFs, stickers, emojis and more.” He adds, “Mobile content can make us an everyday utility, instead of a special event utility. It’s more relevant. We want to move the brand from being useful to the customer three or four times per year to something they can use every day.”
As JibJab continues to grow its customer base, innovation also meant looking at TV marketing during the past two years — something Spiridellis admits he was skeptical about.
“My vice president of marketing had done some TV work at a prior company and, in 2013, he convinced me to test its ability to drive consumers to our site,” he says. “I’m highly skeptical of things I can’t measure — and I didn’t think we’d be able to adequately measure TV. He convinced me we would.”
Results were immediate and positive in that 2013 holiday campaign. “Once we ran the tests, he was right,” Spiridellis says. “I was blown away by how cost effectively we acquired new users. In 2014, when we rolled out a full holiday campaign, we were able to replicate the results at a much greater scale.”
10 Cents on the Dollar
With such a focus on optimization and innovation, it’s no surprise that Spiridellis says that the number of agencies and vendors the company has used over the years is hard to quantify. “We view vendors as a way to keep our internal team lean,” he says. “We really like to find specialized vendors with expertise in a given channel.”
He does call out one agency — Los Angeles-based Science Growth Labs. “They help us on the search marketing and Facebook side,” Spiridellis says. “They’ve been one of our most consistent vendors and have been awesome at finding pockets of opportunity.”
Spiridellis is also clear that — as JibJab continues to grow — he and his marketing executives will continue to find new ways to get its message out in various media, but not at the expense of hurting the brand.
“We’re always really careful to make sure that we’re not destroying 10 cents of brand value for a penny of revenue,” he says. “It’s easy to get that penny with non-user-friendly ideas, like pop-up ads. I’ve always got my antenna up if I see us using something that I don’t like as a user. I police that very aggressively. Sometimes it’s hard, but at the end of the day, you have to remember to include brand value destruction that’s not visible on reports.”
It all falls into what Spiridellis believes about how best to market the business that, in 1999, he and his brother could not have fathomed becoming what it is today.
“It all comes down to being authentic and being honest — with your customers and with the tactics you use,” he says. ■